TMTPOST-- SF Intra-city, China's largest third-party instant delivery platform, has officially launched its "SoFast" express delivery product in the Hong Kong region, marking its first step in testing the overseas market outside of Chinese mainland.

This service, which started on July 1, comes about a year after Meituan entered the Hong Kong on-demand delivery market as the wave of Chinese companies going global has swept into the service sector.

As a third-party on-demand service provider, SoFast delivers documents, food, flowers and electronics among others, differing significantly from Meituan Delivery which focuses mainly on food. However, both companies see Hong Kong as a testing ground, aiming to replicate their operating models and experience in Chinese mainland to the Hong Kong market. When the model proves effective in Hong Kong, their next and bigger goal is the international market.

SoFast's entry into Hong Kong is not only its first major move this year but also an exploration of its journey overseas. “In the future, the entire overseas market will not only be about exporting products but more about exporting service capabilities, which is something we think we should try,” Felix, the head of SF Intra-city’s Hong Kong business, told TMTPost.

With the surge in Chinese mainland businesses expanding to Hong Kong and Hong Kong residents traveling north, local life service companies providing on-demand delivery have doubled down on expanding overseas markets. Unlike purely product exports, on-demand delivery as a part of local life services involves the integration of local business ecosystems and operational capabilities, which also means more challenges in localization.

If SoFast successfully runs its model in Hong Kong following Meituan, it will pave the way for more local life service companies in their going global drive.

The on-demand delivery market in Chinese mainland is overcrowded with competitors, such as ride-hailing platforms Amap and Didi, logistics companies JD and Cainiao, and even short video platforms like Kuaishou and Douyin are also joining the races.

“Compared to the Chinese mainland, the on-demand delivery market in Hong Kong is still a blue ocean,” Felix noted.

Hong Kong's business environment and social cultural demands involve more non-standard scenarios, such as business documents, flowers and cakes, medicines, and even pets. As Hong Kong merchants move online, these scenarios will generate more on-demand delivery needs.

Moreover, as more Chinese mainland businesses expand to Hong Kong, there is an increased demand for on-demand delivery in Hong Kong market.

As of May this year, at least 40 catering companies in the Chinese mainland have applied for or completed trademark registration in Hong Kong, with at least 10 having entered the Hong Kong market, opening nearly 20 stores.

“Different choices by merchants create different on-demand delivery ecosystems. Some merchants not only rely on platforms like Meituan to acquire business but also build online businesses through private traffic channels,” said Felix.

“This not only requires services from Meituan but also from third-party service providers. We hope for the overall business to thrive and for self-owned channels to grow. This provides opportunities for both us and Meituan,” he added.

According to Statista, due to the fast-paced urban lifestyle, Hong Kong has witnessed a surging demand for online delivery services. The total revenue of the online delivery market in Hong Kong is expected to grow by 12.2% to HKD 26.7 billion in 2024, with non-food categories reaching HKD 20.63 billion and maintaining an 11% growth rate in 2025.

Compared to the compound annual growth rate of 57% from 2019 to 2023, and Meituan’s 22% year-on-year growth in GMV after one year in Hong Kong, there is still significant untapped growth potential.

“Based on market research, SoFast’s current pricing is not the highest, and it is even lower than market prices in a bid to enhance competitiveness. In the early stages, we will offer discounts to customers, providing them with better service experiences,” Felix mentioned.

Based on the same order price calculation, SoFast’s cost after the new customer discount is HKD 90; GoGoX and Lalamove cost HKD 165, plus an additional HKD 50 tunnel fee.

For new entrants, offering high cost-effectiveness is always the quickest way to gain market share. Meituan rewrote the Hong Kong on-demand delivery market with its cost-effective “one-person meal” strategy within a year.

After handing out subsidies for a year, Meituan KeeTa’s market share in Q1 2024 reached 43%, surpassing Foodpanda and Deliveroo, which had been operating in Hong Kong for nearly a decade.

“We are not in complete competition with Meituan; instead, we have some cooperation in the delivery layer. We have already reached a strategic cooperation in the mainland to jointly provide on-demand delivery services to merchants,” Felix explained.

Initially, SoFast mainly focused on non-food deliveries such as documents and small parcels in Hong Kong, avoiding direct competition with Meituan in the food delivery sector.

According to Felix, SoFast’s traffic mainly comes from the SF Express app, providing the new product to SF’s existing Hong Kong customers. It offers point-to-point services based on the courier services, with faster product offerings and slightly higher overall charges than the original products.

Felix emphasized that SoFast has built mature capabilities and accumulated extensive experience in the mainland, leveraging these experiences to gain development opportunities in the Hong Kong market.

Hong Kong, with its blend of Eastern and Western cultures, is an ideal place for testing the water and riding the wave to future global expansion. The diverse on-demand delivery needs in Hong Kong, especially in the high-end market, require higher standards for business documents.

“We hope to meet these needs and establish market differentiation. This environment helps develop our overseas capabilities, creating space and foundation for more future development,” said Felix.

This aligns with Meituan founder Wang Xing’s explanation of Meituan’s intention to enter the Hong Kong market.

Wang once said that Hong Kong is an excellent testing ground for Meituan’s global infrastructure and practice path. This means if the model works in Hong Kong, Meituan will expand its footstep overseas.

The overseas expansion plans of Meituan and SoFast represent a shift for Chinese internet companies from merely exporting products and goods to exporting service capabilities. This means Chinese companies are beginning to explore deeper local resource integration and localization operational capabilities.

Regarding Meituan’s expansion to Saudi Arabia, Felix said, “We are market players, learning from each other. We also have our own directions for global expansion, not necessarily reaching the same place simultaneously.”

“But the world is big, and there is always a chance for us to meet each other,” he concluded.